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Why Are Optimistic Entrepreneurs Successful? An Application of the Regulatory Focus Theory

Aidis, Ruta; Mickiewicz, Tomasz; Sauka, Arnis

Aidis, Ruta; Mickiewicz, Tomasz; Sauka, Arnis

2008-02-01

Abstract: Does entrepreneurial optimism affect business performance? Using a unique data set based on repeated survey design, we investigate this relationship empirically. Our measures of ëoptimismí and ërealismí are derived from comparing the turnover growth expectations of 133 owners-managers with the actual outcomes one year later. Our results indicate that entrepreneurial optimists perform significantly better in terms of profits than pessimists. Moreover, it is the optimist-realist combination that performs best. We interpret our results using regulatory focus theory.